Buyers and sellers choose from a wide variety of payment instruments for the exchange of goods and services, including credit cards, debit cards, prepaid cards, and negotiable instruments. To initiate a typical transaction, a buyer presents payment information or a payment instrument to a seller's point-of-sale terminal. The point-of-sale terminal records the payment information, enters the transaction amount, and transmits an authorization request to a third party, such as the seller's financial institution, which then routes the request to the buyer's financial institution. In such a case, the buyer's financial institution transmits an authorization response to the seller's financial institution, which forwards the response to the point-of-sale terminal.
If the transaction is approved, both the buyer and seller register the transaction with their respective financial institutions. Usually this entails the seller depositing a signed transaction receipt with its financial institution. Subsequently, the seller's financial institution credits the seller's account and submits the transaction for clearing and settlement. Once the buyer's financial institution validates the transaction, the transaction amount is deducted from the buyer's account, and the funds are transferred to the seller's financial institution. Further third party intermediary services may be involved at any of these steps. Growing demand to complete payment transactions over electronic systems such as the Internet has led to the development of E-commerce methods and systems. Specifically, M-commerce—the ability to complete transactions over wireless networks using mobile devices—is now an emerging alternative to traditional payment methods and systems.